Intel enjoyed one of its best years ever in 2017. 2018 is going to be a lot tricker.
The chip giant reported its fourth-quarter and full-year earnings Thursday afternoon, setting revenue records in both categories with $17.1 billion in quarterly revenue and $62.8 billion for the full year. Quarterly revenue, which grew four percent, easily surpassed analyst expectations of $16.3 billion as polled by Yahoo Finance.
Intel actually posted a net loss for the quarter, but only because of a one-time tax event associated with the passage of new U.S. tax laws in December. Excluding that charge, net income was $5.2 billion and earnings per share were $1.08, again much higher than analyst estimates of $0.87 per share.
2017 full-year revenue grew 6 percent compared to 2016, but Intel is forecasting a slower revenue growth rate for 2018, perhaps due to the uncertainly over the financial impact of the massive Meltdown and Spectre chip flaws that have forced its some of its customers to work overtime dealing with an issue not of their making.
In the first slide in a presentation accompanying the results, Intel promised that “security is a top priority. We will restore confidence in data security with customer-first urgency, transparency, and timely communication.”
“We’ve been working around the clock with our customers and partners to address the security vulnerabilities known as Meltdown and Spectre,” said Brian Krzanich, Intel CEO, leading off a conference call with analysts following the release of the results by addressing the elephant in the room. Security is “foundational to our products, and critical to the success of our data center strategy,” he said.
The company is projecting 2018 revenue at $65 billion, which would be a 3.5 percent increase over 2017. But Wall Street was expecting even slower full-year revenue growth in 2018, according to Yahoo Finance, which helped boost Intel’s stock in after-hours trading.
Intel will start shipping new, redesigned processors later this year that should implement additional hardware-based mitigations for the Meltdown and Spectre design flaws, Krzanich said.
Revenue from its data center group, which enjoys almost all the market share among cloud computing companies and server vendors, grew 20 percent to $5.6 billion during the fourth quarter. The PC market continued its slow decline, with revenue in that category down two percent to $9 billion.
(Editor’s note: This post was updated several times as more information became available.)